Dynamics has historically met the business needs and IT constraints of small and midsize businesses, however, the CRM solution is clearly moving up market, is very scalable and Microsoft now touts several customers with over one-thousand users.

Alternative Solutions
Buyers may be best advised to consider alternative CRM products when:

Seeking mature vertically focused, industry-specific CRM solutions.

Seeking an enterprise-level contact center solution. While Dynamics is steadily advancing the Service component of the CRM suite, the current version is more practical as a help desk product than a contact center solution.

Internal IT shops standardize on non-Microsoft technologies such as Oracle, Linux or Java/J2EE and users are passionate about their consumer devices such as iPhones, Androids or BlackBerrys.

It's been our observation that businesses with fewer IT resources and an open propensity to outsource more often go with competitor solutions such as Salesforce.com, while businesses with more IT resources tend to more often choose Dynamics CRM.

Concluding Remarks
Microsoft is a cloud convert. While the company has yet to show cloud or CRM innovation, it is a superb fast follower that can generally marshal the resources to emulate the best ideas within one to two software versions. Historically this has worked well for the software giant. However, this strategy often fails once a new market crosses the chasm and the early majority accelerate adoption. Software version cycles are being reduced from every 18 to 24 months on average, to seasonal releases. More frequent releases are also bearing more innovation—social, mobile, analytics, consumer technologies and more—thereby reducing traditional obsolescence, delivering increased customer value and leaving me-too competitors further behind. Decreasing release cycles and increasing customer expectations will only continue as software is delivered as a service and incremental enhancements are distributed to multi-tenant architectures on-demand. Microsoft is today returning to its 1990's playbook—match competitors on features and beat them on price—a viable strategy for market share acquisition to be sure. However, unless Microsoft chooses to replace its fast follower competency with innovation, it risks achieving a leadership position in the CRM software industry.

Dynamics CRM has historically met the business needs and IT constraints of small and midsize businesses, however, the CRM system is clearly moving up market, is very scalable and Microsoft now touts several customers with over one-thousand users.